House prices in the most upmarket parts of London dropped significantly in the past year as speculation about what property taxes Chancellor Rachel Reeves would introduce weighed heavily on homeowners.
In Kensington and Chelsea, one of the most upmarket parts of the city, prices fell by £236,000, or 16.5 per cent, from £1,431,068 to £1,194,726 in October compared with the same month a year earlier. House prices also fell in the south-west of England by 1.3 per cent on average. Combined with a cut in interest rates, this opens up opportunities for buyers.
The average price across the UK capital dropped 2.4 per cent to £547,468, the fastest fall in two years, as speculation mounted over what the Chancellor would introduce in her budget in November.
Ultimately, she opted against introducing a wealth tax or exit tax, but did introduce an annual levy on homes worth more than £2 million. This has been called a mansion tax, though many properties in the city at that value are typical terraced or semi-detached suburban homes.
Meanwhile, across the UK, annual house price growth slowed in October to reach 1.7 per cent, down from 2.0 per cent in September, according to official figures. Across the UK, the average house price in October was £270,000, the Office for National Statistics (ONS) said.
Property values increased to reach £292,000 (a 1.4 per cent annual increase) on average in England in October, £211,000 (1.5 per cent) in Wales, and £192,000 (3.3 per cent) in Scotland. The average house price in Northern Ireland in the third quarter of 2025 was £193,000 – a 7.1 per cent annual increase.
Within England, the north-east
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